Basmati rice exports are expected decline slightly if the current trends are any indication.
From close to 2.2 million tonne of aromatic rise exports last fiscal, the figure is set to fall marginally during 2010-11. The cause for the dip is attributed to a payment crisis with Iran, apart from a high base effect, with exports having posted a healthy growth in the previous fiscal.
?Slowing down of payment from Iran and inventories from the last fiscal would ensure that exports would fall short of last fiscal,? Vijay Setia, president, All India Rice Exporters? Association, told FE. He said that as per the current reports, basmati rice exports have declined by 2 lakh tonne compared with last year.
According to the Agricultural & Processed Food Products Export Development Authority (Apeda), export of the premium aromatic rice increased by close to 35% to 2.2 million tonnes in 2009-10 from 1.6 million tonnes achieved in 2008-09. In value terms, exports crossed R12,000 crore in the last fiscal against R9,476 crore in 2008-09.
The sanctions on Iran have hit Indian basmati rice exporters. Payments from Iran, India?s biggest export destination for the aromatic rice, have slowed because of a stoppage in dollar transactions. ?The exports have slowed down because of Iran payment crisis and I hope that the issue would be sorted out bilaterally soon,? Ashwani Arora, joint managing director of LT foods, a leading exporter of basmati rice said.
The situation has worsened in recent months as exports to Iran through Dubai have been affected because of Abu Dhabi?s apprehensions over Dubai?s independent trade link with the Iranian government.
As FE reported last week, basmati rice exports, which was to the tune of R10,838 crore during the first eight months of 2009-10, declined by 12.27% in value terms in the same period of the current fiscal.
?We have received reports of basmati rice exports picking up during last two months. Exports started on a slower pace as there were huge inventories with importers from the previous year?s stocks,? Asit Tripathy, chairman, Apeda, said.
Production of aromatic rice during the last kharif season increased more than 15% with an increase in acreage. Last year the country produced an estimated 4.5 million tonne of basmati rice.
The government last month allowed exports of three varieties of non-basmati rice, mostly grown in southern states. The exports of non-basmati rice varieties Ponni, Rosematta and Sona Masuri, which are grown in Tamil Nadu, Kerala, Andhra Pradesh and Karnataka, have been allowed after close to three years. However, the exports would be subjected to minimum export price of $850 per tonne.